• Federal Bankruptcy Code: While some federal exemptions might seem applicable, courts have generally ruled that HSAs don’t fall under these protections. 
   
• Illinois State Law: Illinois does not have specific exemptions for HSAs in its state bankruptcy laws.  
   
• Wildcard Exemption: You might be able to use the Illinois “wildcard exemption” to protect a limited amount of your HSA funds. This exemption allows you to claim up to $4,000 of any personal property, including your HSA.
   

HSAs are accounts that can hold tax-free earnings and contributions made by employers. However, account holders may face penalties if they use HSA funds for non-medical expenses. 

Disclaimer: This information is for general knowledge and guidance only and does not constitute legal advice. You should always consult with a qualified bankruptcy attorney for specific advice regarding your situation.

Key Considerations:

• Consult with a Bankruptcy Attorney: Discuss your specific situation with an experienced bankruptcy attorney in Illinois. They can assess your individual circumstances and advise you on the best course of action to protect your assets, including your HSA.
• Understand Bankruptcy Laws: Familiarize yourself with the complexities of bankruptcy law, including exemptions and the potential impact on your HSA.

I hope this information is helpful!

The post Are HSA accounts exempt (protected) in a Chapter 7 bankruptcy in Illinois? appeared first on Chicago Bankruptcy Lawyer.

In the state of Illinois, bankruptcy exemptions are used to protect certain assets from being seized by the bankruptcy court and used to repay creditors. The purpose of these exemptions is to ensure that filers are able to maintain a basic standard of living and keep essential property after filing for bankruptcy.

There are two main types of bankruptcy exemptions in Illinois: state exemptions and federal exemptions. State exemptions are those specified by Illinois law, while federal exemptions are those specified by the U.S. Bankruptcy Code. Filers in Illinois must use the Illinois state exemptions under most circumstances.

State Exemptions in Illinois:

• Homestead Exemption: This exemption allows filers to protect the equity in their primary residence up to a certain dollar amount. In Illinois, the homestead exemption is $15,000 for individuals and $30,000 for married couples.
• Personal Property Exemption: This exemption protects personal property, such as jewelry, and household furnishings, up to a certain dollar amount. In Illinois, the personal property exemption is part of the wildcard exemption (see below) with a total exemption amount of $4,000 for individuals, or $8,000 for married joint filers.
• Tools of the Trade Exemption: This exemption protects tools, equipment, and other items that are necessary for the filer’s trade or business, up to a certain dollar amount. In Illinois, the tools of the trade exemption is $2,400.
• Retirement Account Exemption: This exemption protects retirement accounts, such as IRAs and 401(k)s, from being seized by the bankruptcy court. In Illinois, there is no specific dollar amount limit for this exemption, but there are limits on the type of account and the amount that can be protected.
• Wildcard Exemption: This exemption allows filers to protect cash and personal property (see above) for other assets of their choosing, up to a certain dollar amount. In Illinois, the wildcard exemption is $4,000 for individuals, $8,000 for joint filers.
• Clothing- Necessary wearing apparel is 100% exempt.

Federal Exemptions in Illinois:

• The federal exemptions include exemptions for items such as Social Security benefits, veterans’ benefits, and public assistance, as well as exemptions for pensions and IRAs.

It is important to note that exemptions in Illinois and the federal exemptions are subject to change, and that the specific exemptions available to a filer can depend on a variety of factors, such as the filer’s income and assets, the type of bankruptcy being filed, and the filer’s individual circumstances.

In conclusion, bankruptcy exemptions in Illinois are an important tool for filers seeking to protect their assets while they navigate the bankruptcy process. Understanding the available exemptions, and how they can be used to protect assets, is an important part of the bankruptcy process. If you are considering filing for bankruptcy, it is recommended that you speak with an experienced bankruptcy attorney who can help you understand the exemptions available to you and how they can be used to protect your assets.

Leeders Law is happy to offer you a free consultation to discuss how they can use the bankruptcy exemptions to your advantage.

The post Illinois bankruptcy exemptions appeared first on Chicago Bankruptcy Lawyer.

http://www.innb.uscourts.gov/opinions/pdfs/3467.pdf

In the chapter 7 case, the debtor claimed an exemption for the Notre Dame Football season tickets, for $1100, the price that she paid for them.   She was an employee, and got the tickets at a discount since she was an employee of the University.  They were worth a lot more on the open market.

Both parties briefed the matter, as the judge said it was a matter of first impression in his courtroom.     Are tickets tangible? Intangible?

The judge analyzed state law, case law, and legislative history when making the decision.   The 7th Circuit has decided that cash is intangible in the case  In re Oakley, 344 F.3d 709 (7th Cir. 2003), deciding that the legislative intent of making the tangible property exemption larger in order to protect life’s necessities, such as clothing, furniture, and toilet paper.   Thus allowing for protections for things that make it possible to function.

The court in the current case, agrees with the decision in Oakley, stating:

In Oakley the Seventh Circuit held that although currency is tangible in the literal sense, it is nonetheless an intangible asset in Indiana for exemption purposes. Id. at 713. The court finds this guidance is persuasive in assessing the question before it. Like currency, tickets have no inherent or intrinsic value in and of themselves.  Any value comes from the ability to use the ticket for admission to an event, just as the value in cash stems from the ability to exchange cash for useful goods. If not for the license the football ticket grants its holder to enter an event venue, a football ticket has no more inherent value than any other scrap of paper.

Unfortunately, the judge decided that the Notre Dame Football season tickets were not necessary to enjoy a fresh financial start.  As such, the trustee will be liquidating the asset. So if you are looking to enjoy a Notre Dame football game, another set of tickets may be available!

The post Notre Dame football tickets are not a tangible asset in an Indiana Chapter 7 bankruptcy case appeared first on Chicago Bankruptcy Lawyer.

A no asset report by the standing bankruptcy trustee means there are no assets to administer in the bankruptcy case for the benefit of creditors. It’s either because your exemptions are great enough to protect all of your belongings, or that there is no significant value that the trustee would receive if they tried to liquidate the unexempt asset. (The trustee does not want to sell your used VHS cassette tapes at a flea market to make $11)

The no asset report is filed shortly after the 341 meeting of creditors. If everything is proceeding as planned, the chapter 7 discharge should come about 2 months later.

The post N is for a no asset report in bankruptcy appeared first on Chicago Bankruptcy Lawyer.